B.C. universities post $340 million worth of surpluses thanks to international student tuition

British Columba’s universities and colleges have quietly raked in hundreds of millions of dollars in recent years, posting soaring surpluses thanks largely to increasing numbers of international students.

But as the coffers of B.C.’s universities and colleges have swelled, spending on student instruction and support hasn’t yet caught up, Black Press Media has found after analyzing of 25 post-secondary institutions’ financial statements dating back four years.

The rapid rise in international enrolment has prompted concerns about the pace of growth and the post-secondary experience for both domestic and foreign learners, with some even reporting an increase in xenophobia among local students. Two of the most-profitable mid-sized universities have already decided to re-evaluate their international ambitions, and the leader of the British Columbia Federation of Students says others should consider doing the same.

Combined surplus of $340 million

In 2018/2019, B.C. universities and colleges posted surpluses totaling more than $340 million, the financial statements show. That figure is more than double the $144 million in combined surpluses recorded in 2015/16.

Last fiscal year, the University of British Columbia alone recorded a $136 million surplus. That’s the largest in the province, but in line with the B.C. average, which saw universities take in about five per cent more than they spent last year.

Simon Fraser University, the University of Victoria, Kwantlen Polytechnic University, the University of the Fraser Valley, Thompson Rivers University, Langara College, Douglas College and BCIT all posted surpluses of more than $10 million. Three years ago, only the province’s three largest universities (UBC, UVic and SFU) posted eight-figure surpluses. And while UVic’s surplus was close to its 2018/2019 total, UBC and SFU’s income has doubled and tripled in the three years since. (The figures recorded here don’t include endowment contributions.)

The financial statements show the newfound monetary success of the province’s universities is largely tied to dramatic increases in tuition revenue, which in turn has been driven largely by higher numbers of international students. At many universities popular with international students, fees from foreign students now make up the bulk of all tuition revenue.

While government transfers have grown, they’ve done so only modestly. Meanwhile, provincewide revenues from tuition and related student fees have increased by 37 per cent since 2016.

A handful of mid-sized universities have seen some of the largest increases. Surrey-based Kwantlen Polytechnic University saw tuition revenue rise by 83 per cent over the last three years, while TRU in Kamloops, Capilano University in North Vancouver and Langara College in Vancouver all saw tuition revenue increases of more than 50 per cent. At Kwantlen, TRU and Capilano, tuition revenue jumped by more than 20 per cent between 2017/18 and 2018/19. At UBC, tuition revenue rose by a quarter-billion dollars – a 45 per cent jump – in just three years.

The tuition fees have left universities flush, but the dramatic increase in international students has not been painless.

TRU, which posted an $18 million surplus last year, closed its summer programs to new international students this year. International students now comprise one-third of TRU’s enrolment and last year paid 59 per cent of the university’s total tuition revenue.

Matt Milovick, the university’s vice-president of administration of finance, told Kamloops This Week this spring that the number of international students that signed up for classes the previous summer had been “overwhelming.” The university has not been able to fill all the faculty positions it has created to meet the influx.

The University of the Fraser Valley, where the number of international students has doubled since 2015, has also put the brakes on international enrolment. Officials there now hope to hold the international student population to no more than 20 per cent of all enrolment until a long-term plan is crafted and a variety of concerns are addressed.

In September, a report issued by UFV’s vice-president of students, found a wide range of issues stemming from the dramatic rise in international enrolment.

Domestic students, international students and faculty said UFV needed to change course and provide more support and help. (Read her report at the bottom of this story.)

“One word sums up the overarching theme of what I heard and learned through this process: concern,” Alisa Webb wrote in the report.” Individuals and groups expressed concerns about UFV’s current approach to international admissions and enrolment, about the level of support available to faculty and staff as they navigate this change in classroom and campus composition, and about international student success and our efforts to support it.”

Webb said the university was struggling to give international students the support they need, that domestic students were growing frustrated by the struggles – sometimes perceived, sometimes real – of their international classmates, and that faculty and other staff were increasingly feeling overwhelmed.

Need to ‘get it right’

International students pay tuition at rates much higher than their Canadian classmates, but money is not all they bring to campus.

Their presence is seen to contribute to the goal of “internationalization,” a process that aims to ensure that campuses, classrooms and discussions feature a diversity of perspectives and experiences that reflects the broader world.

Webb was told the integration of foreign students at UFV is riddled with complex challenges, but that the value they bring to campuses makes it worth ensuring the university does its best to “get it right.”

Like many of their Canadian classmates, international students coming to UFV need more support than they have been given, Webb reported.

While all students must meet the same entrance requirements, certain groups have different needs to ensure they are ready to begin university study.

Many international students, Webb found, weren’t familiar with online coursework, the structure of courses and academic integrity standards. They also faced language challenges that made study – and communication with Canadian classmates – more difficult.

Those issues are manageable, Webb said. And many of them overlap with challenges encountered by domestic students, who faculty say are also often unprepared for university-level academic reading and writing.

Some local students have been less sympathetic, though. Webb reported faculty have noted rising frustration among Canadian learners in programs with many international students. The Canadians expressed frustration with their international classmates “perceived and/or actual ‘deficiencies,’” and Webb wrote that some professors “suggest that this is actually leading to intolerance and a rise of xenophobia.”

Webb reported that there needs to be more collaborative work to help support international students, and faculty and staff also need more training.

U.S. ‘nightmare’ driving students north

The financial successes and capacity struggles now facing many universities can be traced back to directives from now-ousted federal and provincial governments that called for Canada, and B.C., to significantly increase the number of international students in the country. But external forces – namely a certain U.S. president – have also played a large role.

Since assuming power in B.C., NDP have called in mandate letters for a “balanced approach” to international enrolment. But foreign-student counts have continued to increase quickly. Donald Trump may be partly to blame. Since his election, the American student visa process has become “a nightmare,” a lawyer working with student immigrants told CNBC earlier this year. Students looking for education outside of their home countries have increasingly turned to Canadian post-secondary institutions – and not just large universities in big cities.

Canada, Webb told The News, is now being seen as “the gold standard for education.”

More money, more risks

While tuition revenue has jumped about 37 per cent, spending on instruction and student supports (many financial statements lump the two categories together) has increased by only about 20 per cent over the last three years.

Some universities, like Capilano, have put their increased revenue toward facilities and other infrastructure upgrades. But many others have yet to spend the money.

One reason for the lag is that the scale of the increase has caught administrators off guard.

“We’ve been way more popular as a destination for students than we’ve anticipated,” Webb said, although she added that enrolment projections are improving.

UFV isn’t alone in that, budgets show.

Across the province, beancounters at B.C. universities and colleges underestimated tuition revenue to the tune of five per cent, or $109 million. A similar pattern took place the year prior.

The international student revenue may not be permanent or long-lasting has also led to conservatism when plans are made to spend that money.

Matt Milovick, the finance vice-president at Thompson Rivers University, warned earlier this year about the stability of international enrolments, and noted that the surpluses could disappear “overnight,” according to Kamloops This Week.

The risk is magnified when the bulk of students come from one region, like in the Fraser Valley, where students from India now make up three-quarters of international enrolment. It wasn’t always that way – just five years ago Chinese students once outnumbered their Indian counterparts.

International disputes, economic turmoil and other unpredictable events have the potential of driving away a large percentage of international students in a very short time. Five years ago, UFV had nearly 500 Chinese students and 50 from Saudi Arabia. By 2018/19, the Chinese figure had decreased by 60 per cent, while just 13 students from Saudi Arabia were studying at UFV.

Webb says it’s also difficult to know exactly what supports international students will need until they arrive in Canada. But she says the university is now ready to invest, with both her report and work done by a separate task force in hand.

“We’ve been able to direct financial resources so some of the things we’re seeing,” Webb says.

That means hiring new counsellors, accessibility advisors, adding transition supports and expandinig student orientation programs. In particular, Webb says the university will be ramping up its University 101 program, which aims to prepare incoming students for the academic rigours of post-secondary study.

Others should follow

Michael Olson, the executive director of the British Columbia Federation of Students, says other universities should also be moderating their international plans and considering the impact of largely unmanaged growth on their student populations.

He said universities need to pay particular attention to improving the experience for international students both to help them as individuals, and to reduce the risk that international enrolment (and revenues) will vanish, hurting both the bottom line of institutions and the economies of their surrounding communities.

“What we’re not really seeing in many cases is that increased money actually going toward services that are ensuring the success of those students who are coming in from other countries to our institutions.”

In a statement, the Ministry of Advanced Education said it is working on a “student-centered and sustainable strategic framework for international education.”

Olson said the province needs to better regulate international education and the tuition fees students pay, and that universities should look to increase the quality of the international student experience, rather than the quantity of those paying tuition.

“We rely on the spending of international students in our communities, the job creation that that spending brings in. But if we continue to treat these international students as cash cows, the same way they choose to come here, they can choose to stop coming here.”

Do you have something to add to this story, or something else we should report on? Email:tolsen@abbynews.com